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12/12/15

This piece on the rise of New Fascismis a decent enough read, though much like IKN it's a bit too mouthy for it's own good. But read it I did and I'm glad I did so because about half way down there's this, which really resonated:

"A generation of leftists decided instead that the true opposition wasn’t a right-wing economics locally — but a global politics they called “neoliberalism”. But much of neoliberalism, in stark opposition to trickle-down economics did in fact lift millions across the globe out of poverty, misery, and despair. Why? Because liberalism, however you choose to define it, is not trickle-down economics: it is precisely the opposite — investing in institutions, people, and societies, so that gluts do not pile up at the top.

"Yet, the left began targeting and protesting the very institutions that were defending the globe from
trickle-down economics — the World Bank, the IMF, the UN. Of course,
I’m sure that those of you who are leftists will quibble with me
vehemently here, and call me a Terrible Person. But the simple fact is
that the IMF and World Bank were created by Keynes precisely to prevent wealth piling up at the top — and that is precisely what they did."

LIMA, PERU--(Marketwired - Dec. 12, 2015) -
Minera IRL Limited ("Minera IRL" or the "Company")
(AIM:MIRL)(BVLAC:MIRL) announces that it has been advised that the
Company's registrar has received a proxy revocation in respect of the
votes whose validity came into question at the Company's Extraordinary
General Meeting of shareholders (the "EGM") on November 26, 2015,
resulting in the adjournment of the EGM and the commencement by the
board of directors of Minera (the "Board") of an investigation into the
validity of such votes. In light of such proxy revocation, the Board has
determined that any potential issue with such votes has been resolved
to its satisfaction and therefore the investigation has terminated. In
his capacity as Chair of the EGM, Mr. Jaime Pinto confirms that,
following such proxy revocation, he presently knows of no reason that
any proxies submitted for the EGM cannot be validated.

The adjourned EGM will
be re-convened on the 24th Floor at 333 Bay Street, Toronto, Ontario M5H
2T6, on December 16, 2015 at 10:00 a.m. EST (3:00 p.m. GMT).

Some of the better chunks of this interview with James Hansen, these days being framed as the father of climate change awareness. My how we human beings like our nametags. Anyway, it's good stuff.

“It’s a fraud really, a fake,” he says, rubbing his head. “It’s just bullshit for them to say: ‘We’ll have a 2C warming target
and then try to do a little better every five years.’ It’s just
worthless words. There is no action, just promises. As long as fossil
fuels appear to be the cheapest fuels out there, they will be continued
to be burned.”...

Hansen, 74, has just returned from Paris where he again called for a
price to be placed on each tonne of carbon from major emitters (he’s suggested
a “fee” – because “taxes scare people off” – of $15 a tonne that would
rise $10 a year and bring in $600bn in the US alone). There aren’t many
takers, even among “big green” as Hansen labels environment groups.

...

“We all foolishly had such high hopes for Obama, to articulate
things, to be like Roosevelt and have fireside chats to explain to the
public why we need to have a rising fee on carbon in order to move to
clean energy,” he says. “But he’s not particularly good at that. He
didn’t make it a priority and now it’s too late for him.”

Hansen is just as scathing of leading Republicans who have embraced
climate science denialism to the chagrin of some party elders.

...

“Many of the conservatives know climate change is not a hoax. But those
running for president are hamstrung by the fact they think they can’t
get the nomination if they say this is an issue. They wouldn’t get money
from the fossil fuel industry.”

For what it's worth, I fully agree with Hansen's capitalist-based solution. Full thing here.

PS: I don't care what you think about this subject so don't bother writing in with carefully chosen links that feed your own prejudices, I won't reply. Please recall at all times that this blog is not a paragon of democracy; it's a dictatorship, it's run by a dictator (me), my opinion is always absolutely correct.

12/11/15

Instantly recognizable 20th century classic classical. If you have one of those friends in your group who "doesn't like all that classical music stuff", play them this seven and a half minutes of greatness. If they haven't grudgingly admitted some change to their absolute position by the end of it, unfriend them and find better people to spend your time with.

Yesterday Marilene Ramos, president of the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) held a press conference which included:

The River Doce will take ten years to recover from the Samarco tailings dams failures. Impressive for a spill that Vale and BHP assured was non-toxic when it occurred.

The November 5th disaster is one of five tailings dam failures in the Minas Gerais region over the last ten years. There is obviously an engineering problem in the area and with so many other tailings facilities there, "it's feasible" that more failures will happen.

Ibama, which has already imposed several fines on Samarco, says it will add substantially more fines to its list next week. This is aside from the U$5.24Bn lawsuit now underway against the company.

Ibama underscored the position of Vale, which says it is not responsible for the failure. Yes of course, Vale. Of course.

So tell me, IKN reader who also reads the general mining press, did you hear about this press conference held by Brazil's most important environmental control body? Nah, didn't think so, BHP and Vale has the English language media in lockdown.

Now be clear, I'm a bear on copper and I think its fundies suck, now and for 2016. In the case of precious metal exposures I've suffered in 2015 but in the case of industrial metals, headed up by copper, I did okay and managed to step out of the way of the speeding express train of
financial death.

And I'm still a bear, but on looking at what might be building in the metal's price chart there's a look of a potential break-out and some relief for the sector. Perhaps. Not calling it, just admitting my bearish position may take a knock in the next couple of weeks. As in maybe. We'll see. Vamos a ver...

12/10/15

The market shrugged its shoulders today, but I thought the news out of Almaden (AMM.to) (AAU) yesterday about its new downsized PEA plan was pretty interesting. So this weekend in The IKN Weekly issue 344 we're going to pretend that the world cares about exploreco projects and do an old-style look at the thing. Just so you know, subbers.

Thanks for coming over and checking the blog so regularly Chuck, it's kind of you (your hits show up on the back office stats here, don't try and pretend otherwise Chuck).

And I know you're feeling nervous about next week because you and your pals still think you have a chance of pulling it off. Well, enjoy the meeting next week Chuck, sit back, relax and let it all flow over you, but I guarantee that you're getting no extra snippets of fun or insight from this humble corner of cyberspace between now and then. Go scurry off and find a better place to feed your neuroses, Chuck.

And talking of scurry, here's a song especially for you. And we can extend the dedication to anyone who eats at The Pilot in Toronto this weekend. Sing along, Chuck. Lah lah lah, Chuck.

According to Radio Bemba Guatemala*, a full two weeks ago an employee of Tahoe Resources (TAHO) (THO.to) was killed while at on duty and at work at the company's Escobal mine. Which begs the question...

WHY HASN'T TAHOE RESOURCES TOLD

ANYONE ABOUT THIS WORK-RELATED DEATH?

...because hell's bells this is 2015 and do they seriously expect to keep things such as deaths at their mines quiet? That aside, we're in a world in which world-class mining companies operate in an open and transparent manner, so this incident points to one thing only, that TAHO is not run in a world-class way.

And now, a mighty U$2Bn market cap mining company has to play catch-up on its internal affairs to a pissant blogger. Nice going, MacArthur. Lookin' good, Ira.

...Mauricio Macri in Argentina as he swears in and becomes the country's next Prez. Ceremony at Congress (without CFK, who threw a hissyfit) and then speechifying (to a half empty hall because CFK's party has also thrown a hissyfit). All good clean fun and as I write these words, Macri's in his motorcade on the way to the gig.

There's one thing that all Bobby Genovese companies have in common: Sooner or later, the shape of their price chart (plus the periods of heavy traded volume) are exactly the same. The M.O. is simplicity itself too, anyone who can read a balance sheet can see how the share price was destined for Crush City.

Until the OSC/BCSC closes down thieves like Bobby G, nobody will ever take the Canadian markets seriously again. This is 2015, information flows like water and the segment of the investment community that isn't taken in by scam merchants can see that the structure they're offered by the regulatory authorities begets this financial violation, time after time.

PS: And yes, IKN has run many posts on JFI since this pump and dump began, starting on August 9th 2014 with this and covering many aspects, including the obvious deterioration of its financials this year (e.g. this post). Many more besides.

12/9/15

Mr. Nelson makes several allegations in his claim, including: alleging a
key role in recognizing the mineral potential of the El Roble project
and acting as a founder of Atico; alleging the existence of a
partnership or joint venture; and alleging oppressive and unfair
treatment related to the issuance of shares, benefits and his exclusion
from the management of Atico. Mr. Nelson seeks various relief,
including: claiming payment of a finder's fee of approximately $436,000
in connection with the El Roble project; seeking the right to purchase
2,500,000 additional shares of Atico at a pre-IPO subscription price
from Atico, or alternatively, the individual defendants; seeking
appointment to the board of directors of Atico or accorded such other
meaningful and ongoing role in the affairs of Atico; and claiming other
damages and costs in addition to the amounts already paid to him for his
geological consulting services.

The allegations of Mr. Nelson have not been proven. The Company
disputes Mr. Nelson's claims and will defend itself in this matter.

"Mr. Nelson, the Company and three of its Directors reached a solution
satisfactory to all parties whereby Mr. Nelson will receive a cash
payment of CAD$550,000, of which CAD$200,000 will be paid by the
Company, and the balance by insurance."

"On a macro-scale, zinc continues to display the strongest short-term
fundamentals of all the base metals (perhaps with the exception of lead,
of which we also produce significant quantities). Global zinc mine
closures have been accelerating however the full impact of well
documented concentrate supply constraints has yet to be felt. LME zinc
warehouse drawdown rates have recently increased to almost double its
normal pace while spot treatment charges have been dropping in
conjunction with announced smelter closures globally, suggestive of a
tightening zinc concentrate market. Given Trevali's strong zinc exposure
and leverage, the Company is well positioned to crystallize value from
strengthening in zinc (and lead) prices going forward."

Scotia today (from the house 'Scoop' morning mailer):

- Zn Revisit: Zinc TCs trending lower on tighter supply (lowest since September 2014):
Zinc TCs, the discounts on refined prices miners grant to smelters to
cover the cost of turning concentrate into metal, slipped to $170-180
per tonne from $175-185 at the end of November on a cost, insurance and
freight (CIF) basis for delivery to Chinese
ports - the lowest since September 2014 and down from $185-195 in October.
Market participants are saying that some Chinese smelters are buying at
TCs of $165 to $175/t for standard grade material. Many didn’t expect
TCs to drop this quickly, thinking that the production cuts we have
been reading about take hold next year but TCs now are reflecting
tighter supply already. Recall that Nyrstar will put its Middle
Tennessee Mines (MTN) in the US on care and maintenance due
to depressed metal prices, which will translate into 50,000 tonnes per
year of zinc-in-concentrate being taken out of the market. This follows
the planned suspension of 400,000 tonnes of zinc concentrate in
addition to the 100,000 tonnes removed by the Myra
Falls and Campo Morado suspensions. As well, Glencore has slashed
annual zinc production by 500,000 tonnes, cutting around 100,000 tonnes
of contained zinc metal in the fourth quarter alone. Chinese domestic
supply has also tightened as some medium-sized
miners have closed due to low prices. Some market participants are
saying that Chinese smelters are operating at around 80 percent of
capacity in November.

This mixed bag of reports is typical of what The IKN Weekly does while covering the political scene in LatAm. It's mostly mining-related and we try our best to cover events in as many countries as possible, but sometimes it's pure political on a macro level (eg the Peru presidential candidates section last weekend).

Back in
2013, the province of Santa Cruz caused a ruckus in its mining sector by
creating the “Impuesto Minero”, or “mining tax, based on charging companies for
1% of the value of their in-situ mineral reserves per year. Companies such as
Goldcorp (Cerro Negro) and Pan American (Triton) in the region railed against
the idea, said it was unconstitutional or impossible to calculate or just plain
and simply unfair. The province meanwhile, under Governor and erstwhile CFK
supporter Daniel Peralta (who has since fallen out with the Kirchnerists)
insisted on its plan, needing the cash to shore up its empty regional coffers.
Since that time legal challenges to the law have blocked any real payments and
the mining company lawyers along the way won several victories, not least when
Pan American managed to get a court to agree that it didn’t have to pay (under
the terms of that time) in July 2015.

We
therefore cut to last week and what now looks like the final chapter in this
surcharge tax story. During in its last session before dissolving the current
provincial administration (the new one starts on December 10th same
as at the national level), the parliament overwhelmingly voted to annul the
‘mining tax’ (8) and it is now a thing of the past. Good news for mining
companies in Santa Cruz.

Argentina: The Macri mining team

With the
inauguration of the new President Macri on December 10th just days
away, we now have the names of the people who will run mining in Argentina. Top
job of Minister of Energy and Mines goes to Juan José Aranguren, an
ex-executive of Shell in Argentina who will surely have more to do with the
country’s hydrocarbon policy (Vaca Muerta etc) than hard rock mining, as
Argentina has always been a bigger player in oil anyway.

Meanwhile
the job of Secretary of Mining (i.e. Veep Mining and reporting to Araguren) has
been given to Daniel Meilán, a career mining guy and public servant who for a
while was sub-secretary of mining in the 1990’s in the Carlos Menem
administration. For a glimpse of the way Meilán sees mining in Argentina today,
this link (9) is to an interview he gave a few months ago to a Cordoba
provincial newspaper and an interesting look at the way he sees the sector,
this of course long before he was picked (to many people’s surprise) as the new
main mining man. It includes quotes such as this on the mining sector under the
CFK government and Jorge Mayoral, the outgoing mining vice-minister:

“We (as a nation) have done so many
things badly that to become credible again we need to demonstrate
(credibility). This is the job, first to demonstrate all this and then go out
looking for foreign investors, but with a package of things already done.”

Then this
on the anti-mining attitude of some Argentine provinces:

“The issue of being for or against
mining is an issue of lack of dialogue. Without dialogue between parties, the
extremist view are favoured. What we need to do is go back and to
national/provincial dialogue. If there are provinces that don’t want mining,
then accept it, but define territories and zones where mining will be
prohibited. We need to get it down an writing (make official) once and for all,
we need to go back to making agreements between the Federal government and the
provinces, because the last ones were many years ago and we need to revalidate
them, to redefine the rules.

“What we need to do is to get
agreement with the grassroots concerns before we start calling for investment.
The work to do is inside the system.”

All that
sounds reasonable enough to me. We wish Meilán good luck (he’ll need it).

Peru: Five candidates do CADE

As noted in
last week’s edition, the top five candidates for the 2016 Presidential election
( in no particular order Alejandro Toledo of the ‘Perú Posible’ party, Alan
García of ‘Partido Aprista’, César Acuña of ‘Alianza para el Progreso’, Pedro
Pablo Kuczynski of ‘Peruanos por el Kambio’, and current poll leader Keiko
Fujimori of ‘Fuerza Popular’, normally known as “Fujimorista Party”) had
speaking spots at the Peru Chamber of Commerce (CADE) annual conference in
Paracas last week. All of them spoke on Friday so I dedicated part of my day on
the speechifying. I wish I hadn’t bothered.

Most of the
time all they talked about was themselves and how they were cut out to be the
next President, rather than talk policies or manifestos. A long way second came
real policy notes, which I found surprising to an audience of Peru’s rich and
successful business community and the people you need to have on your side at
this early stage. A potted summary:

Alejandro Toledo: The
deterioration of Toledo is marked, which could be due to his long-documented
drink problem (I get to write these things, other places worried about lawsuits
will only whisper or suggest). He’s turned into a joke, a cardboard cut-out
politician who is an embarrassment to his country. He had his moment in the
early 2000s, that time has gone and so has any credibility he might have had.

César Acuña: Boorish,
pompous and a terrible public speaker. Unpresentable in polite society, he may
be a successful businessman, politico and rector of the university he founded
(that’s made him very rich) but he has the charisma of a wet lettuce and is so
full of himself he’s almost as painful to witness as Toledo. Mind you, none of
those character weaknesses ever stopped people from becoming high level
politicos in any country. Even though he’s polling fairly well at the moment I
cannot see Acuña mounting a real challenge, plus there are some dark corners of
his personal life that won’t sit well with the public (e.g. history of family
violence and an ex-wife who isn’t afraid of telling the world about it).

Alan García: As usual,
world class oratory and a control of an audience that the others who shared the
podium on Friday can only dream about. García is Peru’s only serious politician
and a master of his (dark) art. However, García also managed to use his time to
say virtually nothing of substance in his eloquent manner (another of his
strong points). Of the five he came off best, because only he’s by far the best
speaker of them all. Content was light, he’ll be relying on the APRA party
machine to get him up in the polls in 2016.

Pedro Pablo Kuczynski:
He went over a few of the manifesto points that have already been announced,
such as his plan to reduce sales tax (IVA) to 15% from the current 18% (a
liquidity thing, which will help money velocity), while offering pre-boxed
platitudes such as his thoughts on mining (translated), “Mining is 50% of
Peru’s exports. We must support mining, (but) no in an irresponsible way.
Mining has to be environmentally responsible”, which revealed nothing new to
anybody present or listening in, perfect politikese. The rest of his time was
spent playing up his business background and qualifications. The worse thing
was his persistent cough, which was distracting all through his speech but also
returns focus to his health and whether a man in his mid-80s is in conditions
to be President. It’s one of the main points against PPK among rank and file
Peruvians, so any signs of health weakness will be jumped upon by his
detractors. He did himself no favours on the health score last Friday though on
the other hand he got the highest approval rating from those present, a solid
84% thumbs-up for his speech by the CADE business crowd. That’s to be expected,
after all.

Keiko Fujimori: Alberto’s
daughter of course, and as such I personally think she’d be negative for the
country and set Peru back in terms of judicial reform and the fight against
corruption, but that’s based more on internal social matters than economy
thoughts and I will give her the credit for being the only one who unveiled
real policies and some of her election platform on Friday instead of going the “Aren’t
I wonderful?” onanist route of the other male strutting candidates. My chief Keiko
takeaway was that her economic policies would be hands-on, with a Finance
Ministry that would be proactive to promote growth (i.e. neo-Keynesian style
government intervention in macro matters) rather than the current (in her
words) auto-pilot Economy Ministry.

Summing up
the five, the good news is that when it comes to Foreign Policy, Foreign
investment and economic growth, none of the five are far from each other and
they can all be classed as “business friendly” and miner friendly”, they’re all
pretty neoliberal with some small degrees of difference. There’s nothing in
these five for those on the outside looking at Peru as an FDI destination
should fear. The bad news is that they’re all mediocre.

Moises
Naim does CADE

Head of the influential magazine
Foreign Policy, the right-wing Venezuelan national Moises Naim was invited
(paid) to address the Peru CADA conference and his main message is captured by
this shortreport in El Comercio (10) which
I’ll translate in full.

During his presentation at
CADE, Naim said that micro-regional powers can block national interests, such
as what has happened with the Conga project in Cajamarca, which generates
poverty.

The expert recommended not
to use hardline strategies nor have a predilection to violently repress
protests against (mining) projects.

“It’s a false temptation
to go in heavy handed (ottonote: In
Spanish “mano dura”, which means “hard hand” and explains the situation when
e.g. police move in with firearms and batons to break up protests).
Projects would have national appeal. In which universities, media, the church
and others are involved. These issues won’t be solved by pressure but by
democracy”, he said.

In Peru mining represents
14% of GDP and more than 60% of total exports. In copper, it’s the world’s third
largest producer.

This is one of those situations
where Peruvians may finally react and the subject gain traction because instead
of being told the obvious by the usual suspect greenies and lefty
hand-wringers, somebody “famous in business” tells them instead. Naim is right,
he’s not making any startling new discovery here, but its the type of discourse
that could positively affect the upcoming election run.

More Peru: Peru’s forex versus the dollar

Here below
is a ten year chart of the Peru Sol (PEN) versus the US Dollar (USD) and it’s a
good visual on how the currency pair has rushed back up to the highs last seen
in 2006, when Toledo was President and gold traded around U$600/oz (seems a
long time ago). Peru’s Sol is a decent proxy for the state of other LatAm
countries’ currencies against the dollar, as its strength has been
commodity-based, it’s a free floating currency and has a Central Bank that normally
uses orthodox policies to keep the transitions smooth (i.e. intervention is on
a short-term level to stop big moves). The interesting bit is the last few
weeks in the pair, because the move up to this weekend’s 3.36 versus the US
Dollar has been a spike, but we now have most national commentators saying that
it’s no flash in the pan and the Sol is likely to keep moving up, to 3.50 or
3.60, because the Central Bank doesn’t have much in the way of ammo left to
defend it.

If you
check the official figures, the Peru Central Bank (BCRP) currently counts on
U$62Bn in international currency reserves but that figure is padded out by the
number of dollars held in bank accounts by citizens and companies, which comes
to around U$36Bn. In fact the BCRP itself has around U$25Bn in liquid reserves
and because it’s been selling dollars in 2015 to keep the Sol from any sharp
deval event, that’s down from just over U$35Bn at the end of 2014. Put in
simple terms, the BCRP is running out of ammunition. The market is now keenly
aware of this (of course) and the Central Bank isn’t likely to drain its dollar
holding down to zero, the result being the acceleration of the deval.

This is
good news for mining costs in Peru in dollar terms, of course. Not so great for
its citizenry, who are about to go through a burst of inflation due to the
import costs of goods.

Chile:
More on the country’s rise in mining unemployment

Following on from last week’s
report in IKN342 that 167 of Chile’s 1,100 small copper mining concerns have
closed in 2015, this week the country’s official stats office, INE, reported
(11) that total employment in mining in 2015 has dropped by 19,000, or 7.9%,
compared to the same period of 2014. At present some 222,770 people are
directly employed by mining, compared to 241,770 this time last year. All
sector commentators expect the layoffs to continue and say that there isn’t a
company out there that hasn’t seen significant layoffs. Even the State
controlled Codelco has rid itself of 4,292 employees.

For a little more context, Chile’s
government normally uses a 2.5X factoring for direct to indirect jobs in
mining, i.e. the number of auxiliary jobs that depend on the wealth created by
the mining industry. If we use that thumb-rule number and put the two groups
together, we can estimate that 66,500 jobs have been lost in Chile due to the
slowdown in mining. In a country with a labor force of 7.6m, that works out at
0.9% added to the unemployment stats just this year by mining layoffs. That’s
significant and even more so when you consider that mining jobs in Chile are
traditionally some of the highest paid jobs in the country, especially when
compared on a like-for-like basis to similar level employment opportunities in
other sectors.

Ecuador: Cordova
does Mines & Money

It was interesting to read that
Javier Cordova, Mining Minister for Ecuador, was doing the rounds at London’s
Mines & Money conference last week and talking to the press about the State
burden deal his country expects to close with Lundin Gold (LUG.to) soon
(according to Global Mining Observer (12). The deal is 22% corporate tax plus a
5% royalty), or that according to this Bloomie report (13) Rio Tinto “is
considering investment in Ecuador” on one or more of the copper project areas
coming up for grabs as from January 2016 when the government tenders new
concession areas to the world.

I voiced my...errr...opinion of
Señor Cordova on the blog on Thursday (14) when hearing these multiple messages
start coming through, but I’ll expand on that here by saying that Cordova is a
classic “jam tomorrow” artist who has been promising the world for the Ecuador
mining sector ever since Correa came to power, but so far has delivered very
little.

Also, the LUG situation is already
flagged as the company has stated its timeline includes a finalized deal with
the government at end 2015 or early 2016 (by law each mining company in Ecuador
negotiates its own State burden deal). The figures cited by Cordova sound
reasonable too, but we must remember that they’re only part of the whole package
and according to the nation’s constitution, the State must take at least 51% of
total gross proceeds.

As for Rio Tinto, it may be true
and it may be false, but as it comes at a time when Rio Tinto is pulling out of
copper projects such as La Granja in Cajamarca Peru, the thought of it moving
to pick up space in the sketchy Ecuador jurisdiction doesn’t sit right.
Especially from a man with Cordova’s track record while pressing flesh at a
trade bash. Avoid Ecuador.

Political
risk increases for Tahoe Resources (TAHO) (THO.to)

Last week we noted the potential
for increased political risk for Tahoe Resources at Escobal in Guatemala and
part of the translated report was about Alberto Rotondo, the Peruvian ex-army
man who was contracted by TAHO to run its security campaign and as a result of
the violence as arrested by the government. Here’s an excerpt:

The ex-army officer is
currently in prison waiting to stand trial for acts of violence against
community members (in San Rafael Las Flores). Also, according to the CALAS
lawyer, “Since 2012 the company has faced a legal action for environmental
damage caused since the time of its construction and the legal case is about to
come before a judge.”

As luck (?) would have it, it turns
out that Señor Rotondo absconded from his house arrest in Guatemala, an event
reported by Mining Watch on December 1st (15). Rotondo made his
escape on November 28th because he didn’t want to face his trial
that was due to start in January. He is now in Peru according to his own
defence attorney (16), but here’s how Mining Watch told it earlier in the week:

Guatemala City/Ottawa/Tatamagouche) On Monday, plaintiffs in
the criminal case against Tahoe Resources’ former security manager, Alberto
Rotondo, were informed that he had escaped police custody. Rotondo is accused
of having ordered private security guards to attack peaceful protestors outside
the Escobal mine in southeastern Guatemala on April 27, 2013, wounding seven
men.

“This demonstrates that the Guatemalan justice system,
especially the National Civil Police, still suffers from high levels of
corruption and influence peddling. The police failed to implement the judge’s
order to ensure constant police supervision of Rotondo, now turned fugitive,”
remarked Rafael Maldonado, Director of the Centre for Environmental, Social and
Legal Action (CALAS).

This could cause a major headache
for TAHO, as even though they’re bound to swear blind it has nothing to do with
them the optics are very poor and come at a time when the incoming President
Jimmy Morales may look for his example for a crusade against corruption and
sketchy goings on in the Otto Pérez Molina administration period. Meanwhile,
the political risk mounting in Guatemala for TAHO is being completely ignored
by the market and TAHO continues to trade in the front rank of precious metals
plays (and more like an outperforming goldie, rather than a stock largely
dependent on silver for its well-being). IKN reiterates its “avoid” call on
this stock, risk does not justify the potential reward and there are far safer
ways of playing the PM space.

Colombia
awards an environmental permit to an open-pit project

This went largely undetected by the
English language trade press but I think it’s important. Last week the
Gramalote project (51% AngloGold Ashanti, 49% B2Gold) was awarded its
environmental permit to continue work, a permit that will allow Gramalote to
move forward with work on its pre-feasibility study eventually to feasibility
stage that AngloGold Ashanti (project operator) estimates for 2018.

Notably B2 didn’t make a squeak
about this event (it doesn’t seem to care much about Gramalote any more) but it
caught my eye because as this local report (17) points out, even though it’s
only a permit to continue exploration work rather than a full EIA for a mine
operation to come it’s the first time that any environmental impact permit has
been awarded to any open-pit gold mining project in Colombia in decades (and
yes, that statement includes La Colosa). When it comes to the bureaucratic
swamp that is the government of Colombia, anything positive that that happens
to promote the mining industry needs to have as much light as possible shone on
it because if so, they may feel willing to do it all again. Or as Ken Kluksdahl,
Senior VP Projects for AngloGold Ashanti in Colombia, put it (translated),
“This is an important step for the future, which shows us that the Colombian
authorities back large and modern mining projects that comply with the highest
social and environmental standards. It shows the opening of the country to
business and that our future in Colombia is advancing, as we work towards
concluding our current pre-feasibility study”. A more obvious hint towards La
Colosa’s future is difficult to imagine.

My isn't it strange how Casey Research pumps so many things run by Amir Adnani, it's surely just pure coincidence how they buy into his stocks and then promote them to the world and then suddenly go quiet about them? Just coincidence. Anyway, you remember the Casey Research pump on Uranium Energy Corp (UEC) earlier in the year? How Marin Katusa pumped it to death via his Energy Report thing before jumping ship, then how Louis Lobito Little Wolf James picked it up and called it (and I quote), "UEC is without question my favorite pick in the uranium space"?

Yeah well UEC published its quarter last night and reported yet another loss, which isn't a surprise because it didn't sell anything. But some of the numbers that came along with the quarter make for interesting reading:

In one quarter, cash dropped from U$10m to U$5.35m

Workings capital is now negative U$2.3m

As from July next year, it has to pay back $1.667m per month until its U$20m financial debt is fully paid.

And unlike the unsubstantiated and wholly anecdotal claims made by Casey Research early this year, there's no stockpiling of product going on. All you need to do is check the inventories line item (unchanged at U$252k) to know that.

Bottom line: These people aren't doing anything, but they're happy enough to get through $2.5m a quarter in G&A

So how does UEC plan to fill in the obvious gap in its finances. Well as UEC says itself, they're not about to go profitable anytime soon so they plan to sell paper. Here's a quote from the 10-Q:

"As the Company does not expect to achieve and maintain
profitability in the near term, the continuation of the Company as a going
concern is dependent upon its ability to obtain adequate additional financing
which the Company has successfully secured since its inception, including those
from asset divestitures. However, there is no assurance that the Company will be
successful in securing any form of additional financing in the future when
required and on terms favorable to the Company, therefore substantial doubt
exist as to whether the Company’s cash resources and working capital will be
sufficient to enable the Company to continue as a going concern for the next
twelve months. The continued operations of the Company, including the
recoverability of the carrying values of its assets, are dependent ultimately on
the Company’s ability to achieve and maintain profitability and positive cash
flow from its operations."

At its current share price of U$1.03, UEC has a market cap of U$101.86m. Its book value is $27.5m (give or take the change) which means this company is running a price/book of 3.7X.

Price Book at three point seven times.

In this market for miners.

For a company with dwindling cash.

No production.

Every intention to dilute the share count and finance.

And $20m of real financial debt on board.

This is the type of bovine excrement that Casey Research recommends to people. A more obvious short in the mining space is difficult to envisage.

...as signed-up readers of the daily e-mail digest, IKN Nerve Centre would like to inform these gentlemen that they are prime examples of everything that is wrong about the Canadian capital markets world. A special place in hell awaits them after the way their treated their fellow human beings during this current incarnation.

UPDATE: We have mail feedback. For the record, he may have visited since 2010 (that I don't know) but he only joined the mailing list a month ago.

I have been forwarded your note today.

I’ve
been on your distribution list and/or visited your website since at
least 2010 when (name supplied) pointed it out to me when we worked together
at Dundee. I don’t recall meeting you but clear that you would prefer
if I was not on your
email distribution list so please feel free to drop me.

First the non-news, as the mining world's lapdog press corps continue to give zero coverage to the Samarco disaster and how its industry has managed to ruin a whole Amazon basin river. Contemptible media coverage, vomitworthy. Shame on you all.

As of November 2015, the investors do not have title to the residential
lots, orchards or shares of Agricola GGC (the farm operating company)
for which they paid and that Johnson agreed to deliver. Loan payments to
GGC investors have not been paid. In addition, titles to two GGC
companies and the two parcels that were to become Galt’s Gulch Chile are
clouded. The project is insolvent.

Unintentionally hilarious.

Here's Shore Capital this morning on Minera IRL. Yes true, what are those irregularities?

PS: The news that the location of the San José galleon, reputedly carrying around a billion dollars' or seventeen billion dollars or choose-you-own-report billion dollars' worth of gold and jewels when it sunk off the coast of Cartagena, has been located and its booty assigned to the country has caused a massive uptick in stories that spell Colombia with a "U". Dumbass gringo hacks never die, they just hibernate a while.

12/7/15

Apparently, Jaime NOT HODGES! Pinto, non-executive chairman of Minera IRL (IRL.to) MIRL.L) with a dark and murky past, has been telling people he knows nothing about his links with the corruption case involving the State of Peru and Elliot Associates (Paul Singer et al) which, according to the government of Peru, ripped off the country to the tune of U$50m.

Therefore and to help Jaime Pinto catch up on what the rest of us already know, here's the official Peruvian Congress case file translated into English. This should embed here if I've done it right but if not you can get your own copy of the downloadable PDF at this link.

And here are a few screen captures of the file, including the front page...

...the contents page...

...and this jolly little segment from the conclusion section (and there's lots more where that came from).

Enjoy reading about yourself "for the first time", Jaime. It's little wonder the investigation into these allegations of corruption have been reactivated recently, what with Keiko riding high in the polls. Because yes, no matter what Jaime NOT HODGES! Pinto might tell you or want to make you believe, this case has now been re-opened by the Peruvian public prosecutor and is being actively investigated by the State authorities.

Lake Shore (LSG.to) (LSG) has done approx 4X average daily volume on its main Canadian ticker this morning and in the process has held onto its price gains of Friday while all around it wilt.

There are two theories doing the rounds, this desk one of many place to have heard the same:

1) That GG is interested in buying out LSG has been an open secret for many months (and hey, full disclosure, it's one of the basic reasons I'm long LSG).

2) Chuck leaving and Garofalo entering means that Chuck will want to seal his deal before exit.

3) Chuck leaving and Garofalo entering means the other possible deal, that of the much larger Detour acquisition, is now off the table because the new boy won't want to bite at that big a cherry early in his tenure.

And that's about the size of it, thus LSG gets a new influx of buyers today.

1) Join a mining company.
2) Stay for five years. Do things.
3) Turn the company from a U$2.038Bn market capper with a share price of U$11.89 into a U$1.08Bn market capper with a share price of U$4.58.
4) Become CEO of Goldcorp

First Place: "A news release from Minera IRL SA", the one on Wednesday that announced the subsidiary board meeting wouldn't go ahead until the main IRL EGM was completed. To stop Hodges from running with his sneaky plan, the one that he daren't tell Jones about.

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